| Affinity Moving Services Glossary of Terms |
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PARTIAL PAYMENT A payment that is not sufficient to cover the scheduled monthly principal and interest payment on a mortgage loan.
PAYMENT CHANGE DATE The date when a new monthly payment amount takes effect on an adjustable rate mortgage (ARM). Generally, the payment change date occurs in the month immediately after the adjustment date and the borrower is notified 30 days prior as to the new rate.
PAYOFF To pay the outstanding balance of a loan in full.
PERIODIC PAYMENT CAP A provision of an adjustable-rate mortgage (ARM) that limits how much the interest rate or loan payments may increase or decrease. In upward rate markets, it protects the borrower from large increases in the interest rate or monthly payment at each adjustment period. See cap.
PERIODIC RATE CAP A provision of an adjustable-rate mortgage (ARM) that limits how much the interest rate or loan payments may increase or decrease. In upward rate markets, it protects the borrower from large increases in the interest rate or monthly payment at each adjustment period. See cap.
PERSONAL PROPERTY Any property that is not real property or is not permanently fixed to land. Cash, furniture, and cars are all examples of personal property.
The loss of value to real property from all causes due to the action of the elements and old age. Physical deterioration can be either curable or incurable.
PIGGYBACK A combination of two loans. Example: A loan is made for 90% of the home price. 80% of the purchase price is supplied by a 1st mortgage and 10% by a 2nd mortgage. The 2nd mortgage is piggybacked on the 1st.
PITI See Principal, Interest, Taxes, and Insurance (PITI).
PITI RESERVES A cash amount that a borrower must have on hand after making a down payment and paying all closing costs for the purchase of a home. The principal, interest, taxes, and insurance (PITI) reserves must equal the amount that the borrower would have to pay for PITI for a predefined number of months.
See PUD .
PLAT BOOK A record of recorded subdivisions of land.
PMI See Private Mortgage Insurance
POINT A one-time charge by the lender for originating a loan. A point is 1% of the amount of the mortgage (e.g., 1,000 on a $100,000 loan).
POLICE POWER The authority of a government to adopt and enforce law governing the use of real estate based on the need to promote public safety, health, and general welfare.
A legal document authorizing one person to act on another's behalf. A power of attorney can grant complete authority or can be limited to certain acts and/or certain periods of time.
PRE-APPROVAL A lender's conditional agreement to lend a specific amount on specific terms to a homebuyer. Your lender may make it subject to satisfactory appraisal and title review and no change in financial condition. With pre-approval, you know your file has been reviewed by an underwriter and that you're approved (subject to satisfactory appraisal and no change in financial condition). Either way, you can shop with assurance, because you'll know up-front how large a loan you could qualify for.
PREARRANGED REFINANCING AGREEMENT A formal or informal arrangement between a lender and a borrower where the lender agrees to offer special terms (such as a reduction in the rate or closing costs) for a future refinancing as an inducement for the borrower to enter into the original mortgage transaction.
PREFORECLOSURE SALE A procedure in which the investor allows a mortgagor to avoid foreclosure by selling the property, typically for less than the amount that is owed to the lender.
PRE-PAID ITEMS Items required by lender to be paid at closing prior to the period they cover such as prorated property taxes, homeowners insurance and pre-paid interest.
PRE-PAID INTEREST Mortgage interest that is paid in advance of when it is due.
PREPAYMENT Any amount paid to reduce the principal balance of a loan before the due date. Payment in full on a mortgage that may result from a sale of the property, the owner's decision to pay off the loan in full, or a foreclosure. In each case, prepayment means payment occurs before the loan has been fully amortized.
A fee that may be charged to a borrower who pays off a loan before it is due. Generally, a prepayment penalty is added to a loan in exchange for a discounted rate.
The process of determining how much money a prospective home buyer might be eligible to borrow before he or she applies for a loan. When you pre-qualify, we ask you for information about your credit, assets and debts. Based on the information you provide and the loan type you want, the lender will calculate how large a loan you could qualify for.
PRIMARY RESIDENCE The place someone lives most of the time.
PRIME RATE The interest rate that banks charge on short-term loans to its most creditworthy customers. Changes in the prime rate influence changes in other rates, including mortgage interest rates.
The amount borrowed or remaining unpaid. The part of the monthly payment that reduces the remaining balance of a mortgage.
The outstanding balance on a mortgage. The principal balance does not include interest or any other charges. See remaining balance.
PRINCIPAL, INTEREST, TAXES, AND INSURANCE (PITI ) Four potential components of a monthly mortgage payment. Principal refers to the part of the monthly payment that reduces the remaining balance of the mortgage. Interest is the fee charged for borrowing money. Taxes and insurance refer to the amounts that may be paid into an escrow account each month for property taxes and mortgage and hazard insurance.
PRINCIPAL PAYMENT Portion of your monthly payment that reduces the remaining balance of a home loan.
PRIVATE MORTGAGE INSURANCE (PMI) Mortgage insurance that is provided by a private mortgage insurance company to protect lenders against loss if a borrower defaults. Most lenders generally require PMI for a loan with a loan-to-value (LTV) percentage in excess of 80 %.
PROMISSORY NOTE A written promise to repay a specified amount over a specified period of time.
PUBLIC AUCTION A meeting in an announced public location to sell property to repay a mortgage that is in default.
PUD (PLANNED UNIT DEVELOPMENT) A project or subdivision that includes common property that is owned and maintained by a homeowners' association for the benefit and use of the individual PUD unit owners.
PURCHASE AGREEMENT A written contract signed by the buyer and seller stating the terms and conditions under which a property will be sold.
PURCHASE MONEY TRANSACTION A loan used in part as payment for a purchase. A loan that is used to buy a home is called a purchase money mortgage.
PURCHASE PRICE The total amount paid for a home. |